Reshoring: Benefits of Bringing Manufacturing Jobs Back to the U.S.

While offshoring was a major manufacturing trend in the last few decades, a new one is taking its place at a surprising rate: reshoring. When companies reshore manufacturing jobs, whether through investing in new facilities in the United States or by moving more of their processes to existing stateside facilities, they can achieve a variety of benefits. Just how many jobs have foreign investors added to the U.S. job market recently, why, and what manufacturing benefits do they achieve?

Foreign investment in U.S. jobs on the rise

In 2017 alone, employers added over 171,000 jobs via reshoring and foreign direct investment (FDI), the first year since 1970 in which manufacturers reshored more jobs than they moved offshore. In fact, this surge in the number of jobs foreign investors added to the U.S. workforce inspired the Reshoring Initiative, a group that focuses on building and rebuilding business in the country, to reevaluate their data from 2010 through 2016. This revision showed 67,000 jobs were added during that timespan in addition to what they’d previously reported. With this extra increase and the jobs added in 2017, the total number of jobs brought to the U.S. since 2010 came in at more than 576,000.

While these jobs created by reshoring and FDI are not all manufacturing-based, they “equal 90% of the 189,000 total manufacturing jobs added in 2017” and “cumulative return of over half a million jobs since 2010 equals over 50% of the total increase in U.S. manufacturing jobs during that period.” Those in manufacturing and other industries saw major increases as the numbers “were up 122% compared to unrevised 2016 totals and 52% compared to revised 2016 totals.”

While the uptick in reshoring and FDI were likely based on optimism due to tax cuts, FDI surpassed reshoring in the number of jobs added. That means more foreign manufacturers starting new endeavors in the U.S. expanded their facilities and offered more opportunities than manufacturers operating stateside. However, while FDI has beat out reshoring in adding to job numbers, “reshoring has closed most of the gap since 2015.”

Jobs coming to the U.S. in 2017 from reshoring and FDI combined showed a sharp uptick.

Reshoring and FDI benefits

While more available American jobs is promising to those in the workforce and looking to enter it, adding U.S. jobs is also incredibly beneficial for foreign investors. According to the Reshoring Initiative 2017 Data Report, the reasons they cited for investment in U.S. manufacturing include wanting to:

  • Become part of the “strongest economy in the developed world.”
  • Receive higher profits for the same goods they could produce offshore.
  • Avoid tariffs.
  • Achieve shorter lead times as well as saving money on delivery and freight.
  • Provide their customers with products more sustainably and ethically sourced.
  • Achieve more value and improving their brand image with products “Made in the U.S.”
  • Improve manufacturing processes through 3-D printing and automation.

Are you a foreign company owner looking to invest in American manufacturing? A stateside manufacturing professional interested in the new career opportunities reshoring can bring? A global manufacturer considering investing more in your U.S. facilities? An individual hoping to enter the industry and begin your career in manufacturing? Whatever your role in the industry, the trend is clear: Reshoring is gaining steam, and the United States is once again a sought-after manufacturing country.

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